Chile\'s president Michelle Bachelet
Chilean President Michelle Bachelet denied rumours she would be resigning from office on 7 April. (Reuters)

Chilean President Michelle Bachelet's name was used during loan negotiations in the Caval scandal, former Caval consultant Sergio Bustos testified on 21 February, recently released documents show.

According to 24Horas, Bustos claimed the company was having a difficult time negotiating the multimillion dollar loan from Banco de Chile in October 2013.

"We continued to try to get the help of the bank's director, but it was not possible and he definitely did not intervene," Bustos said. "We were told that no bank director would intervene on our behalf and that our only option was to talk to the bank's vice president (Andrónico Luksic) because our credit was out of the bank's norm."

Bustos added that when the meeting with Luksic continued to be postponed, fellow company consultant Victorino Arrepol suggested Natalia Compagnon, Bachelet's daughter-in-law, talk to her mother-in-law. "Victorino suggested the idea that Natalia Compagnon talk to her mother-in-law and that she ask her for a meeting with Luksic. It was thought to be a good idea and it was put in motion," Bustos told authorities.

However, Bustos said that it was ultimately decided that Bachelet not be involved because she was in the middle of her presidential campaign. The former Caval consultant said it was then decided that he request a meeting with Luksic on behalf of Bachelet for Campagnon and her co-owner Mauricio Valero. If it worked, Bustos said the plan was to have Campagnon put Luksic in contact with Bachelet.

The scandal has hit the Presidency

The scheme allegedly worked and Bustos was told that Luksic would look into their loan.

Bustos's testimony contradicts Compagnon's 8 April testimony and Bachelet's own claims that she knew nothing of the loan negotiations. The corruption scandal involving her daughter-in-law and son Sebastián Dávalos has rocked Bachelet's return to La Moneda and has forced her to deny continuous rumours that she would step down from office.

Compagnon and Dávalos are being investigated after Caval purchased land in Machalí, Chile using the $10m (£6.7m) loan he secured from Banco de Chile. The company later sold the land at a higher price, netting about $5m in profit.

According to 24Horas, Bustos has sued Caval for close to 200m Chilean pesos ($326,130; £219,863) over a salary dispute.